Time Warner's ( TWX) AOL is in talks with former CBS News anchor Dan Rather about developing original video programming, according to a person familiar with the situation.

It was unclear how long the discussions, which were reported earlier by the Hollywood Reporter, have been going on or whether a potential resolution is near. An AOL spokesman declined to comment and a representative for Rather couldn't be reached.

A big name like Rather could help the Time Warner business at a time when it's trying to lure more users and advertisers from other sites including Yahoo! ( YHOO) and Microsoft's ( MSFT) MSN. AOL also is considering placing the remaining content that's now only available to its subscribers on its free AOL.com portal. Those changes could mean the layoffs of thousands of employees, according to news reports.

AOL has long been a sore point for the investors of New York-based Time Warner. Billionaire Carl Icahn noted AOL's subpar performance during his recent push to boost the company's lagging share price. President Jeffrey Bewkes, who is seen as a potential successor to Chief Executive Richard Parsons, began overseeing AOL earlier this year.

. Though AOL has seen improved advertising sales and has won kudos for events, including last year's Live 8 concerts, the unit's challenges remain daunting. Its dial-up subscribers continue to flee to faster service, and competition for advertising dollars continues to intensify. AOL and publishing were the only Time Warner units to show a decline in operating income in the first quarter.

Though AOL has one of the most popular news Web sites, it relies on third parties for most of its content. Advertisers are increasingly interested in Web sites with original content that attracts a dedicated group of users, which Rather would attract.

Rather, who left the CBS Evening News last year following a controversial story about President Bush's military service, remains a polarizing figure who would no doubt attract users to AOL. Rather Tuesday signed a deal with Mark Cuban's HDNet channel to host a weekly news program that will debut in October. He ended his 44-year career with CBS News several weeks ago after he reportedly felt that he didn't have enough work to do on its flagship 60 Minutes show.

Shares of Time Warner, also the parent of Sports Illustrated and the Cartoon Network, fell 26 cents to $16.41 in midafternoon trading.